SACRAMENTO, CA — This week, the No on 40 coalition is fact-checking the false and misleading claim that Proposition 40 delivers a major boost to education. The facts: California’s top education leaders oppose the measure because it bypasses Proposition 98, shortchanges classrooms and students by billions of dollars, risks triggering further education cuts in the future, and threatens the stable, reliable funding schools depend on.
KEY QUESTIONS: If schools stand to benefit from Prop. 40, why are the state’s top education leaders all opposed? How can proponents of Prop. 40 claim to support education while intentionally bypassing California’s constitutional school funding guarantees under Proposition 98? When Prop. 40 erodes California’s tax base and blows a hole in the state budget, how will the school funding gap be filled?
THE CLAIM: Prop. 40 is a major boost to education.
THE FACTS:
The state’s top education leaders are all opposed to Prop. 40. The state’s top education groups representing teachers, school boards, school administrators, and school nurses all reject this measure. This includes the California Teachers Association, California School Boards Association, Association of California School Administrators, California School Nurses Organization, and other educators and school leaders across the state.
While claiming to prioritize education, Prop. 40 bypasses school funding requirements. Prop. 40 exempts itself from Prop. 98, bypassing decades-old, voter-approved constitutional protections for school funding. As the state’s non-partisan Legislative Analyst’s Office (LAO) explains: “Other state laws that require some tax revenue to be used in certain ways, like spending on schools and building the state’s rainy day savings, would not apply to this money.”
This means schools and students will lose out on billions of dollars in funding. If Prop. 40 revenues were directed to the General Fund and subject to Prop. 98, K-14 education programs would receive nearly 40 percent of proceeds. Instead, according to the LAO’s former chief economist, under Prop. 40 schools are expected to lose between $3 to $3.5 billion per year, for a total of $16.7 billion over the five-year period.
Schools face further cuts in the long run. As the LAO put it, when the state’s entrepreneurs, innovators, and investors depart and the state’s tax base erodes, “this would mean less money for the state’s general budget that supports education, health care, prisons, and other services.” The California Policy and Budget Center also warns that “the bigger concern for the state is the potential impact on ongoing state income tax revenues, which could put a strain on the state budget in the future.” According to Stanford University research, once lost income tax revenue is considered, Prop. 40 would leave the state worse off by an estimated $25 billion.
Prop. 40 does not actually guarantee any funding for education. Under Prop. 40, revenue would be placed in a special fund exempt from Prop. 98, with 90 percent allocated to health programs and only 10 percent allocated to education and food assistance combined. The measure grants complete discretion to the Legislature over whether to allocate the 10% to education, food assistance or both, meaning there’s no guarantee schools will receive any funding under the measure.
It threatens stable, reliable funding schools depend on. Prop. 40 is creating uncertainty for Prop. 3, backed by the California Teachers Association, which provides the durable, reliable, long-term funding California needs to fund education and sustain critical public services. This is driving voter confusion and risks the state’s long-term fiscal health.
WHAT THEY’RE SAYING:
California Governor Gavin Newsom: “I’m voting no because this measure dedicates almost all of the revenue it raises to a single category of state spending. It ignores our public schools, as the California Teachers Association has rightly pointed out, by failing to provide sustainable funding that our communities, parents and children deserve…We can’t let a single advocacy organization, however well-intentioned, write the state’s tax code on its own terms. We make those decisions together through the elected Legislature, through a budget, and through the public process that voters built precisely to prevent any single interest from prevailing with disregard for the rest.” (6/26/26)
California Teachers Association: “After thorough review and democratic debate about [Prop. 40], our State Council of Delegates – 800 educator representatives from throughout the state – determined that this policy will not provide the sustainable and long-lasting funding that our schools and communities deserve.” (6/7/26)
California School Boards Association CEO and Executive Director Vernon M. Billy: “If Prop. 40 passes, our schools, teachers, and students lose out — it’s that simple. We need durable, sustained solutions, not questionable, one-time experiments like Prop. 40.” (8/25/26)
Association of California School Administrators President Dr. Rene Rickard: “California’s students and schools have too much to lose under Proposition 40. The measure guarantees schools none of its revenue, places those dollars outside California’s longstanding constitutional protections for education and threatens the ongoing funding classrooms depend on. ACSA opposes Proposition 40 because students deserve resources they can count on, not a measure that will leave them with less.” (7/30/26)
California School Nurses Organization: “California needs more resources for health care, but Proposition 40 is a risky experiment that could ultimately leave our state with less funding for critical services. Every day, school nurses see how closely student health and academic success are connected. Yet Proposition 40 bypasses Proposition 98’s voter-approved constitutional school funding guarantee, potentially shortchanging our classrooms by billions of dollars. Proposition 40 is simply the wrong way to address California’s health care and education challenges.” (10/19/26)
Zócalo Public Square California Editor Joe Mathews: “The political idiocy of this approach is staggering. By walling off a huge potential revenue source for just one sector, Prop. 40 managed to alienate education advocates, many progressive Democrats and anyone else who relies on the state budget. That’s why the outgoing governor, the incoming governor and the powerful California Teachers Association — all of whom would like more tax revenues — oppose the measure.” (10/18/26)
Among the state legislators standing against Proposition 40 are Assemblymember David Alvarez, who serves on the Assembly Committee on Education and Senator Christopher Cabaldon, who serves on the Senate Committee on Education.
Members of school, community college, and education boards and districts across California also oppose Prop 40, including from the Alameda County Board of Education; Cascade Union Elementary School District; Cerritos Community College District Board of Trustees; Corona-Norco Unified School District; East Side Union High School District; El Camino Community College Board of Trustees; Evergreen School District Board of Trustees; Lakeside Union School District; Lompoc Unified School District; Modesto City Schools; Mt. Diablo Unified School District Board of Education; Natomas Unified School District; Norwalk-La Mirada Board of Education; Oroville Union High School District; Portola Valley School District; Rancho Santiago Community College District; Rosemead School District; San Leandro Unified School District; San Mateo Union High School District; and Sierra Joint Community College District.
In recent weeks, the No on 40 coalition has fact-checked proponents’ claims Prop. 40: will solve California’s budget problems, is just a one-time tax, won’t impact California’s economy, lowers costs, improves care, and protects against more health insurance company profits, and will address California’s healthcare needs.